Why I Hate Time Sheets – Part II

When I ‘retired’ from Arthur Young and Company a couple of years ago, (1978) it wasn’t because I didn’t love the profession, or the work. It wasn’t because the compensation was inadequate. It was the job. It was my employer. I wasn’t trusted. I was given an annual quota of time to fill, monitored by a semi-monthly report submitted on my time sheet in quarter hours. Annually, there was a summary of my hourly performance in comparison to my peers and to employees that I had never met, who had served before me. We complied with an arbitrary standard we had no input in setting. The majority of my waking hours were planned for me, without my input. Was it voluntary? Was it our choice? Absolutely not. We referred to the two year experience requirement in California to become a CPA as ‘indentured servitude’. The turnover in the ‘Big 8’ was in excess of 90% over the first five years, even then. Like most others, I left after two years.

Why did we tolerate it? Simply speaking, there was a shortage of jobs and an abundance of candidates to fill them. If you weren’t willing to make the ‘sacrifice’ there were ten others who were. Did we have a different work ethic, ability or attitude then, than those ‘kids’ of today? I don’t believe so. We didn’t have choices that our employers had to compete with. That has changed.

In the past six years, since the passage of Sarbanes-Oxley, the amount of accounting work for professional firms has, by some estimates, tripled. The corresponding demand in industry has increased proportionately. Simultaneously, many states have stiffened the requirements for certification by implementing a 150 hour standard. So is the answer to increase compensation, improve flexibility or become more efficient as Rick Telberg advocates as our only solutions?

In the past thirty years I’ve reviewed the annual surveys done by numerous organizations, including the AICPA, and I don’t recall even one instance where compensation was the first priority of the respondents at the staff level . (Although it is generally ranked as ‘most important’ by the partner group responding.) So the exodus is not compensation related. Is it flexibility? Most professional firms have adopted flex time, and yet we continue to lose talent.

Efficiency is not the issue. We are certainly more efficient, technologically, today than we were even five years ago, yet the staffing crisis is worse than ever. Logically, with revenue based on hours worked, and time sheets, the more ‘efficient’ we become as service providers, the quicker our fees will drop, the less ability we will have to pay competitive salaries, and the faster we will all go broke. Can you improve your efficiency enough to have an impact?

In our firm we are concerned about ‘effectiveness’ over efficiency. Efficiency is a function of selling time. We sell knowledge. We are focused on the overall quality of the service we provide, rather than how fast we can provide it. So if it’s not compensation, flex time or technology what have we done as a firm that has virtually eliminated turnover; improved team member morale and client satisfaction simultaneously; increased revenue and allowed us to grow at an annual rate of more than 50%? Trust.
Thirty years ago, as a married twenty eight year old ex-Vietnam commanding officer my employer didn’t trust me. They set my schedule, and hours and forced me to report on them. I punched a time clock. Is that necessary with knowledge workers? Do we not trust our professionals to give their best and make every effort to provide quality service? Do we believe that, as management, we are more capable than our knowledge workers, of establishing and enforcing one agenda for everyone that meets the needs of our many clients and varied team members without their input? That would be ridiculous. Yet, as a profession, we have micromanaged our knowledge workers to the point where they are leaving the profession because they can’t stand the ‘job’, not because they don’t love the work. Nothing has changed in the way we were managed as knowledge workers forty years ago, or the way we manage knowledge workers today. We say we trust them, but nonetheless we try to dictate. It did not work then, and it certainly does not work now.

We hire because the desirable candidates are intelligent, committed, hard working, honest, energetic and motivated. And then we smother them with a system of micromanagement that limits all of those qualities. It is not surprising that within a short time they seek other opportunities. We are going to continue to see an exodus from our profession until we make it a desirable career. We have to quit micromanaging, (as hard as that is) and provide our knowledge workers with the opportunities and respect they deserve, if we want them to stay.

After over thirty years in the profession, shackled to a business model predicated on selling time and tracking it on time sheets, we finally realized we weren’t selling time, and abandoned the time sheet – the most insidious micromanagement tool ever employed. The impacts are summarized above. We have adopted a business model, outlined by Ron Baker in his book Firm of the Future. It is a radical departure from the way we had done business for so many years. Sounds frightening? It is, but what we’ve done in the past isn’t working; doing nothing isn’t acceptable; so what choice do we have?